- Team Genesis was 260 members strong and laid off 20% in round I.
- The second round saw a 30% cut in round II, bringing the team to 145.
- Silvergate Capital laid off nearly 40% of its workforce.
The ongoing crypto winter and ‘black swan’ events such as the Terra ecosystem collapse and FTX saga have made the crypto industry endure many difficulties, weaker players have already left the arena, and the stronger ones are barely keeping it together. The latest news in the series is that Genesis has cut its 30% workforce in their second layoff round to cut costs amid an ongoing downtrend.
A spokesperson from the company confirmed that:
“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally.”
Wall Street Journal first reported the layoffs and said that Genesis is also considering the possibility of filing for chapter 11 bankruptcy in the United States. Citing the people familiar with the matter, the report also discusses the firms working with investment bank Moelis & Co. to evaluate their options.
In an email, Genesis’ spokesperson said:
“We continue working with our advisors, in collaboration with Digital Currency Group and advisors appointed by various client groups, to evaluate options to preserve client assets and move business forward.”
The whole industry is suffering the aftereffects of the collapse and defunctioning of major crypto firms and ecosystems. All these have made a general investor move away from crypto; people are no longer willing to invest enthusiastically as they did earlier. Also, the fear of the upcoming recession curtailed the risk-taking ability of investors, as the majority of them want to keep their assets in a trusted instrument.
Silvergate Capital Corp is also said to have laid off 200 employees, or nearly 40% of their workforce, as a cost-cutting measure. Their stock crashed by 42%, as they experienced a sharp drop in crypto-related deposits, citing terrified investors pulling more than $8 billion in deposits.
Genesis now has a total of 145 employees; the team was 260 members strong, as they laid off 20% workforce in the first round.
Genesis Global Capital has frozen customers’ withdrawal since November, the reasons being FTX collapse and related “unprecedented market dislocation.”
In a letter to clients on Wednesday, Genesis said they are trying to find solutions to mend this crisis, but they will need more time.
Through the letter, Genesis says that their derivatives and spot trading businesses are working as usual and fully operational. They are serving the client’s trading requirements as before.
The important thing to consider is that they have made considerable progress in refining the business plans for Genesis’ client offerings. Including the reduction of costs and driving efficiencies throughout their business lines.
Also, their continued efforts, and sheer focus on sharpening the business, would push Genesis in the right direction. Along with the new year 2023, they could provide more options for working out the lending business.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/06/genesis-cuts-30-workforce-in-second-round-layoff-industry-under-pressure/